Amazon on Fire

Last week’s launch of the Kindle Fire in New York City was more than just another tablet launch. It marked a shift in style and technology for Amazon.com and its founder, Jeff Bezos. And, writes ARTHUR GOLDSTUCK, it put Apple directly in the firing line.
There are few things that can upstage an Apple product launch, and New York discovered one last week: the launch of an Amazon product that can do more than compete with the Apple equivalent.

The news conference in the Big Apple was one of the most watched technology events of the year, as the world waited with baited breath for Amazon CEO Jeff Bezos to take the stage.

Amazon’s CEO Jeff Bezos

He had a few disadvantages: his face is not as well-known as that of Apple’s Steve Jobs; his dress is not as relaxed; he does not have an army of fanboys who will genuflect at his merest gesture.

But he did have one thing Apple has not yet delivered: a tablet computer at half the price of a laptop.

Amazon’s Kindle Fire is the device that will turn the tablet computer market into more than a one-horse race. It is a 7-inch tablet with the quality design of BlackBerry’s Playbook – on which it was based – but without any of its weaknesses.

More important, it will sell at $199.99 when it hits the shelves in the USA in November. That’s well under half the price of the entry-level Apple iPad, and finally addresses the one glaring and fatal flaw in almost every other tablet offering.

That flaw is not high prices. The flaw is prices that are higher than those of Apple’s iPad.

When the market leader is selling at $499 – or, in South Africa – at R4399 – selling a competing but not quite as compelling product for $500 or R4400 represents an instant surrender of the market to Apple.

Considering that most other tablets have been coming in at a $100 or more above the iPad, it doesn’t take a brain surgeon to figure out why they aren’t making more headway in the market. In fact, a brain surgeon is the last person you should ask to set the price, as that is a sure-fire way to get an overpriced operation from someone who doesn’t fully understand the mechanism with which he’s messing.

The competitors also appear to believe they can simply remove customers’ brains to get them to pay more for a lesser device. Jeff Bezos is the first CEO to see the light.

And, as Steve Jobs loved to say, one more thing: Jeff Bezos also announced two new Kindle e-readers for electronic books. Amazon already had the world’s best-selling e-reader with the $139 Kindle. What more could you ask? For one thing, you could have asked for a low-end version for $79. And for another, a touch-screen version for $99. And you’d have got it. The latter is called the Kindle Touch, and clearly targets the branding Apple enjoys with the iPod Touch.

(Note: None of these devices are expected to be available at retail stores in South Africa. They will probably be available from online retailers eventually.)

The low-end version is the truly revolutionary device. For example, for around R600, you now have a device that can store every textbook a child will need in his or her entire school life, or students in their entire university careers. If electronic versions of text books cost just half of the physical versions, issuing one of these readers to every student in the world will be one of the most cost-effective investments ever made in education.

And it doesn’t have to be Amazon’s device. There is little doubt that other manufacturers will try to emulate them, and we will soon have a market flooded with sub-$100 readers.

On the tablet front, Apple is likely to come up with a low-end iPad that takes on the Kindle Fire. It would be silly to say that such a development would revolutionise the market. Apple already did that in April 2010 with the launch of the iPad. And Amazon did it once again in September 2011.

* Arthur Goldstuck heads up the World Wide Worx (www.worldwideworx.com) market research organisation and is editor-in-chief of Gadget. Follow him on Twitter on @art2gee